Search this article on Google: Conditions and Enforcement of Foreign Awards Under The Arbitration and Conciliation Act
Conditions and Enforcement of Foreign Awards Under The Arbitration and Conciliation Act
In this comprehensive article, we enlist our experts at SimranLaw, who analyze the complex legal issues related to the conditions and enforcement of foreign awards under The Arbitration and Conciliation Act. By leveraging years of experience, these experts bring to light the nuances of this legal issue in an effort to deepen readers’ understanding.
Understanding The Arbitration and Conciliation Act
The Arbitration and Conciliation Act, 1996, is a comprehensive piece of legislation that consolidates the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign arbitral awards, and related matters. Section 44 to 60 in Part II of the Act deals with Enforcement of Certain Foreign Awards.
Conditions for Enforcement of Foreign Awards
According to Section 48 of the Arbitration and Conciliation Act, enforcement of a foreign award may be denied on certain grounds. This includes the inability of a party to present its case, tribunals exceeding their scope, non-arbitrable disputes and violation of public policy.
- Incapacity of the parties or invalidity under the law to which they have subjected it.
- Lack of proper notice to the party against whom the award is invoked or he was unable to present his case.
- An award that deals with a disagreement not contemplated by or falling within the terms of the submission to arbitration.
- Award contains decisions on matters beyond the scope of the arbitration agreement.
- Composition of the arbitral tribunal or the arbitral procedure was not as per the agreement between parties.
- Award not binding or has been set aside or suspended.
- Subject matter of the difference is not capable of settlement by arbitration under the law of India.
- Enforcement would be contrary to the public policy of India.
Case Examples and Judgments
1. Renusagar Power Co. Ltd. v. General Electric Co.
In this landmark case, the Supreme Court held that the enforcement of foreign award would be refused on the ground that it is contrary to public policy if it is contrary to (i) fundamental policy of Indian law; or (ii) the interests of India; or (iii) justice or morality.
2. Shri Lal Mahal Ltd. v. Progetto Grano Spa
This case saw the Supreme Court provide a narrow construction to the term ‘public policy’ for enforcement of foreign awards. It held that a contravention of a provision of Indian Law would not lead to refusal of enforcement of a foreign award under Section 48(2)(b) of the Act.
3. NAFED v. Alimenta S.A.
In this case, the Supreme court ruled that a foreign award that infringes upon the fundamental policy of Indian law can be denied enforcement under the Act.
The enforcement procedure can be summarized as follows:
- The party looking to enforce a foreign award must apply to the court as per the provisions of Section 47 of The Act.
- The court must be satisfied that the foreign award is enforceable.
- In case the court is satisfied that the foreign award is enforceable, the award shall be deemed to be a decree of that court.
- After this, the award can be executed under Order XXI of the Code of Civil Procedure, 1908 like a decree of the court.
The experts at SimranLaw, through experience and in-depth understanding of the law, reinforce the notion that the enforcement of foreign awards, although complex, is attainable with meticulous handling of required procedures. It is crucial to understand these conditions, case examples, and procedures to insightfully navigate the maze of international commercial arbitration.